Feb 02, 2023

Getting Ahead: Child tax credit 2022

Posted Feb 02, 2023 3:41 PM

By Patricia Jones, Alliance (Neb.) Community Task Force: Creating Opportunity

Now that January has ended, we should have all the forms we need to file our federal and state income taxes. One of the biggest changes in our federal 2022 taxes is the Child Tax Credit, which is claimed by tens of millions of Americans every year.

As a response to the economic problems created by COVID, for 2021 Congress changed the child tax credit so it was higher and fully refundable. Their goal was to reduce child poverty in the United States.

And it worked! Combined with other relief efforts, the expansion helped lower child poverty by more than 40 percent between 2020 and 2021, from 9.7% to a record low of 5.2%, according to the Census Bureau. This meant 3.7 million children were lifted out of poverty in 2021.

What were the changes? The amount of the credit was $3,000 per child, $3,600 if they were under age 6. 17-year-olds were included. For July through December, the credit was paid out monthly: $250 per month for each qualifying child age 6 to 17, $300 per month for each qualifying child under age 6. This enabled families to budget and spend the money as it was needed.

Those changes all ended in December, 2021, for taxes filed by April, 2022.

The rules reverted back to those that were in place for filing 2020 returns. The amount of the credit is $2,000 per child through age 16. There were no early payments last year.

According to the IRS, you can claim the 2022 Child Tax Credit for each qualifying child, meaning

your dependent must:

路 Be under age 17 at the end of the year

路 Be your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of one of these (grandchild, niece or nephew)

路 Provide no more than half of their own financial support during the year

路 Have lived with you for more than half the year

路 Be properly claimed as your dependent on your tax return

路 Have been a U.S. citizen, U.S. national, or U.S. resident alien

路 Have a valid Social Security Number

You qualify for the full amount of the 2022 Child Tax Credit for each qualifying child if you meet all eligibility factors and your annual income is not more than $200,000 ($400,000 if filing a joint return). Parents and guardians with higher incomes may be eligible to claim a partial credit.

Last year households could claim the credit even if they hadn't earned income from a job or didn't owe any income taxes. Instead, only up to $1,500 of the Child Tax Credit is refundable for some lower-income individuals with children. You must have at least $2,500 of earned income to even qualify for this partial refund.

You have to file a tax return to get any of the Child Tax Credit refund. You must file Schedule 8812 to figure the amount of the credit.

Families who qualify for the Child Tax Credit might also qualify for the Child and Dependent Care Credit, Earned Income Tax Credit, Adoption Credit, or Education credits.

The IRS asks that, if possible, people file electronically rather than mailing in paper forms. The library has public computers that anyone can use. Log in using your library card number. If you aren鈥檛 a patron of the library, you can use a guest pass if you provide a current photo ID. You can print from the computer for 25垄 a page.

The library will print blank tax forms for patrons at no cost at their request. This does not include the tax instruction booklets, just the blank tax forms.

The IRS is generally promising refunds within 21 days of filing of electronic returns. This would be true for people who file online, make no errors on their return, and request that their refund be directly deposited into their bank account.

If you qualify for tax credits and are getting a refund, file your income taxes soon!